Council greenlights the setup of the European fund for sustainable development
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On 25 September, the Council adopted a regulation establishing a European fund for sustainable development (EFSD). The fund will be setup on 28 September.
The EFSD is the main instrument for the implementation of the European external investment plan (EIP) which supports investments in African and neighbourhood countries. The main objective of the plan is to contribute to the achievement of Sustainable Development Goals of the Agenda 2030 through boosting jobs and growth, while addressing the root causes of migration.
With an initial budget of 3 350 million euros, the fund is intended to trigger up to 44 billion euro of investments. This amount could be doubled if member states and other donors match EU contributions. The fund will contribute to financing projects in a wide range of sectors, such as energy, transport, social infrastructure, digital economy, sustainable use of natural resources, agriculture and local services.
The EFSD will encourage the private sector to invest in countries or sectors where it otherwise would not do so, such as fragile or conflict-affected countries. Similarly to the European Fund for Strategic Investment that will support investments within the EU, the fund will offer guarantees and support the use of blending mechanisms to support more risky projects. It will operate as a "one-stop shop", receiving financing proposals from financial institutions and public or private investors and delivering a wide range of financial support to eligible investments.
The Parliament adopted the text on 6 July. The regulation will be published in the Official Journal on 27 September. On 28 September, the EFSD strategic board will hold its first meeting to discuss the overall strategy and investment priorities for the fund.